Admitted vs. Non-Admitted Insurance Carriers

If an insurance proposal you received describes the insurance company as "non-admitted," "excess lines," or "surplus lines," you may be wondering what those terms mean — and whether you should be concerned. The short answer: these are legitimate, regulated ways of insuring risks that the standard market may not accept, and they come with a few important differences that every policyholder should understand before buying.

What Is an Admitted Carrier?

An admitted carrier (also called an "authorized" or "licensed" insurer) is an insurance company that has been licensed by the New York State Department of Financial Services (DFS) to sell insurance in New York. Being admitted generally means:

• The company's policy forms and, for many lines of insurance, its rates are filed with New York regulators.
• The company is subject to New York's financial solvency oversight and examination requirements.
• The company participates in the New York Property/Casualty Insurance Security Funds. These funds may pay certain covered claims, up to statutory limits, if a licensed insurer becomes insolvent.

Most personal auto and homeowners policies in New York are written by admitted carriers.

What Is a Non-Admitted (Excess Lines) Carrier?

A non-admitted carrier is an insurance company that is not licensed by New York, but is permitted to insure New York risks through a licensed excess line broker. In New York, this market is commonly called the "excess lines" market; in most other states it's called "surplus lines." These insurers are licensed and regulated in their home state or country, and to accept New York business they must meet eligibility standards — including minimum capital and surplus requirements — that are monitored with the help of the Excess Line Association of New York (ELANY), an organization created by New York law to facilitate and oversee excess line placements.

Unlike admitted carriers, excess line insurers generally do not file their rates or policy forms with New York regulators. This "freedom of rate and form" is what allows them to insure risks the standard market declines — they can craft terms and pricing for situations that don't fit a filed, one-size-fits-many product.

Why Would My Coverage Be Offered Through the Excess Lines Market?

The excess lines market exists as a safety valve for risks the admitted market is unable or unwilling to write. Common examples include:

• Unusual or hard-to-place risks — unique properties, new business ventures, or operations without an established track record
• Businesses or properties with prior claims activity
• Higher-hazard exposures, such as certain coastal properties, vacant buildings, or specialized liability risks
• Situations where admitted carriers have reduced their appetite or capacity in a particular market

New York doesn't allow excess line placements as a first resort. Under New York Insurance Law § 2118 and Regulation 41, the excess line broker must generally document a "diligent effort" to obtain the coverage from insurers licensed in New York — typically by showing declinations from authorized insurers — before placing the risk with a non-admitted carrier. (Certain hard-to-place coverages on New York's "export list" are exempt from this requirement because the state has already determined the admitted market for them is limited.) In other words, if we're presenting an excess lines option, it's usually because the standard market wasn't available for that particular risk.

What It Means for You as a Policyholder

An excess lines policy can provide real, meaningful coverage — but there are differences worth understanding:

• No New York security fund protection. Excess line insurers are not protected by the New York Property/Casualty Insurance Security Funds. If the insurer were to become insolvent, those funds would not be available to pay claims. This is the single most important difference, and it's why the financial strength of the insurer matters (more on that below).
• Policy terms may differ from standard forms. Because rates and forms are not filed with or approved by New York regulators, coverage terms, conditions, and exclusions can vary from what you may be used to seeing. It's worth reading the quote and policy carefully and asking questions about anything unfamiliar.
• Taxes and fees. Excess line placements are subject to New York excess line premium taxes and stamping fees, which are itemized on your documents in addition to the premium. See ELANY for current tax and fee information.
• Written disclosure. New York requires that you receive a written notice disclosing that the coverage is being placed with a non-admitted insurer. This isn't a warning that something is wrong — it's a standard, legally required disclosure that accompanies every excess line placement.

Does Non-Admitted Mean the Company Is Less Safe?

Not necessarily. "Non-admitted" describes a company's licensing status in New York — not its financial condition. Many excess line insurers are members of large, well-known insurance groups, and to remain eligible in New York they must satisfy capital and surplus standards. Even Lloyd's of London, one of the oldest names in insurance, writes much of its U.S. business on a non-admitted basis.

That said, because security fund protection does not apply, financial strength is worth checking. Independent rating agencies such as AM Best publish financial strength ratings for most insurers, and ELANY publishes its list of eligible excess line insurers. If you'd like, we can point you to the rating information for the specific company on your quote.

How We Handle Excess Line Placements

When we present an option from a non-admitted carrier, we work through licensed excess line brokers, provide the disclosures New York requires, and are happy to answer questions about how the proposed coverage differs from your current policy so you can decide what fits your needs. If you have questions about a quote you've received — admitted or not — give us a call at 585-657-6101 and a licensed insurance professional can help you understand your options.

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